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VAT Questions and Answers

VAT Questions

As a Vantage Fee Protect client you would have unlimited access to our tax and VAT advice line.  Our tax and VAT consultants have a combined experience in excess of 250 years and have been providing effective tax solutions since 1988.

Consequently the Vantage tax advice and VAT advice lines don’t just give you access to a ‘telephone advisor’ who will read from an HMRC manual. Instead you get access to a team of experienced and qualified tax consultants, who can give you the level of insight and opinion that you require.

VAT FAQ’s

 


VAT Management Charges

My client has 2 VAT registered companies. One is a fully taxable consultancy business, the other is a new property investment company that is partly exempt.

The consultancy company incurs all the costs for the running both businesses including; rent of the offices both companies operate from, all utilities, cost of employees employed by the consultancy company but that will also spend time working for the property investment company etc.

The consultancy company intends to make a management charge to the associated business and has suggested that this be at a token value. Can they do this?

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Revoking an Option to Tax

My client purchased a commercial property over 20 years ago and opted to tax it to claim the VAT he incurred. It has been rented out ever since and obviously he charged VAT on the rent and declared this to HMRC. After 20 years of making the option to tax he stopped charging and declaring VAT. He has now had a VAT inspection and HMRC are demanding VAT on the recent rent charges but his option to tax is now over 20 years old and expired, so why do HMRC still want VAT on the rent?

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Christmas Hampers

My client is a food retailer and is putting together ‘Christmas boxes’ that include items which, when sold separately, would be standard-rated or zero-rated. “These ‘Christmas boxes’ are to be sold at a single price. How do I account for VAT on these sales?”

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Business Property Relief

My clients (husband and wife) have a Limited Company with a 50/50 shareholding. It is an Engineering/Fabrication company and has been trading for four years. They have asked me to do some Estate Planning to look at their exposure to Inheritance Tax (IHT) and I’m unsure as to whether IHT Business Property Relief (BPR) will be available even though they’ve held the shares for more than two years. I have read some information indicating that it would be due, but then I’ve also read about a rule where the deceased needs to have control of the company in order to qualify. Can you confirm if BPR is due?

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VAT Return Reclaim

How do I get a repayment from HMRC after submitting a VAT return reclaim?

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Claiming VAT on Business Entertainment

My client is throwing a party for his staff and are allowing the staff to bring a guest. They have incurred VAT on the hire of the venue, entertainment and catering. Can my client claim this VAT?

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Is my customer VAT registered?

How do I check if a supplier or customer is VAT registered and giving me their correct VAT number?

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VAT for Intending Traders

My client is a newly formed property development company and we have recently tried to register them for VAT as an “intending trader” but HMRC have refused the application, asking for proof of land ownership and a copy of Planning Permission, neither of which my client has yet. What other evidence can I provide to get HMRC to accept their “intending trader” registration?

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Receiving a visit from a VAT officer

My client was the subject of a VAT visit and during the visit the VAT officer advised that he was going to uplift my client’s records and accounts and take them away with him, which he did and provided my client with a receipt for the records. Does the officer have the legal right to do this?

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Do I charge VAT?

My client is providing landscaping services to a developer constructing a new house. Do I charge VAT?

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Can you leave the Flat Rate Scheme retrospectively?

My client has previously been using the Flat Rate Scheme (FRS) but now wishes to change to normal accounting method. He applied to leave with effect from the start of his current VAT period but HMRC have refused this date, advising his leaving date will be the start of the next VAT period. Can my client leave retrospectively?

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Should you charge overseas customers VAT?

My client provides staff in the entertainment industry and is hiring out a DJ for an event to be held in the UK. The invoice is being sent to a business in Dubai, do we charge VAT?

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Will the sale of this project be outside UK VAT?

Our client is a UK based company that has been set up to buy a plot of land, build a number of commercial premises on the land. All funding for the development project is to come from a ‘loan’ made by an investment company based in the British Virgin Islands. On completion of the project the development company will sell the land and new commercial properties to the BVI investment company, the sale value being over and above the value of the ‘loan’ from the BVI company and the BVI company paying the development company the balance due.

Can the UK based company register for VAT, and claim the VAT incurred on the development? Also, as the sale will be to an investment company based in BVI will the sale be outside the scope of UK VAT?

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